International pricing

Pricing has always been a delicate business in retail. But now, as a result of international price transparency and comparison, online retailing is significantly changing the pricing decisions of retail and brand owners.

In order to navigate this new landscape, traditional pricing strategies have to be re-thought. Traditional paradigms are rapidly becoming unsustainable as consumers become increasingly confident about buying from overseas vendors--with international fulfilment, certainty around delivered price and ease-of-return, all improving.

When ecommerce represented a small proportion of sales, online pricing transparency was merely an annoyance. However, as some retailers have ramped up their global online sales, many other markets have realised that their pricing propositions are systemically uncompetitive. 

In today’s market, the wide spread of prices creates a huge challenge for the local retailers and brand owners trying to manage distribution. For example, (see the graphic below), consumers buying a Canon PowerShot SX30 IS, have a wide range of both domestic and international retailers to purchase from. Canon.co.uk, a British company, prices its Canon PowerShot SX30 IS in stark comparison to DigitalRev (based in Hong Kong), or B&H (US), both of which are cheaper to buy than Canon UK even with shipping and duty charges. The challenge for retailers in the UK then, is to recognise that they are now competing on a global scale, even if they don’t play internationally.

 

Michael Ross is a director at eCommera, a provider of ecommerce services.

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